[The following information applies to the questions displayed below.] The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation ExpenseStore Equipment, Sales Salaries Expense, Rent ExpenseSelling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.

NELSON COMPANY
Unadjusted Trial Balance
January 31
	Debit	Credit
Cash	$ 26,500
Merchandise inventory	13,000
Store supplies	5,900
Prepaid insurance	2,700
Store equipment	42,900
Accumulated depreciationStore equipment		$ 18,500
Accounts payable		15,000
J. Nelson, Capital		34,000
J. Nelson, Withdrawals	2,300
Sales		115,800
Sales discounts	1,900
Sales returns and allowances	2,200
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	13,350
Office salaries expense	13,350
Insurance expense	0
Rent expenseSelling space	6,000
Rent expenseOffice space	6,000
Store supplies expense	0
Advertising expense	9,200
Totals	$ 183,300	$ 183,300

Additional Information:

1. Store supplies still available at fiscal year-end amount to $1,850.
2. Expired insurance, an administrative expense, is $1,600 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,000 of inventory is still available at fiscal year-end.

Required: 1. Using the above information, prepare adjusting journal entries. 2. Prepare a multiple-step income statement for the year ended January 31 that begins with gross sales and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. 3. Prepare a single-step income statement for the year ended January 31.